International Business

International Business Management deals with the maintenance and development of a multinational operation across national borders, whose manager has the knowledge and the skills to manage and handle cross-cultural processes, stakeholders and business environments in a right way.

Internationalization Strategy Selection

Choice of the strategy does not consist merely of a collection of isolated decisions on products, markets, channels, partners and operation modes. These decisions are also core issues of a competitive strategy. Therefore, the choice of a strategy is all about choosing an appropriate framework for the growth and internationalization strategy for the company‘s competitive success. That is, the choice of strategy must be understood within the context of strategic planning.

The strategy of the firm is concerned with matching a firm‘s resources and capabilities to the opportunities and challenges arising from the external environment. This could just as easily be restated as, €•The choice of the growth and internationalization strategy is concerned with matching a firm‘s resources and capabilities to the opportunities and challenges arising from the external environment.… Read the rest

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Importance of International HRM

Various threats generated by the liberalization of an economy can be met only through bringing corresponding changes in management practices including practices related to International HRM. In the newer management practices, more emphasis has been given to International HRM because of the following factors:

1. Emphasis on Core Competency.

Post-liberalization, many organizations have started focusing on their core competence and businesses are being organized around that. Core competence is a unique strength of an organization that may not be shared by others. This may be in the form of unique financial resources (finance available at a much lower cost), manpower resources, marketing capability, or technological capability.… Read the rest

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Implications for International HRM

Diversity of various types in a global company suggests that HRM practices have to be tailor-made to suit the local conditions. Such practices can be seen in the context of different HRM functions.

Recruitment and Selection

A global company has the following alternative approaches to recruitment and selection of employees:

  1. Ethnocentric-all key positions, in headquarters as well as subsidiaries, are staffed by parent-country nationals.
  2. Polycentric-key positions in subsidiaries staffed by host-country nationals and those in headquarters staffed by parent-country nationals.
  3. Regiocentric-key positions staffed by host-country nationals within particular geographical regions (such as continent-wise).
  4. Geocentric-key positions in headquarters as well as subsidiaries staffed by people based on merit, irrespective of their nationality.
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International Human Resource Management (IHRM) – HRM from an International Perspective

International Human Resource Management

International Human Resource Management (IHRM) involves ascertaining the corporate strategy of the company and assessing the corresponding human resource needs; determining the recruitment, staffing and organizational strategy; recruiting, inducting, training and developing and motivating the personnel; putting in place the performance appraisal and compensation plans and industrial relations strategy and the effective management of all these functions from an international perspective.

The strategic role of HRM is complex enough in a purely domestic firm, but it is more complex in an international business, where staffing, management development, performance evaluation, and compensation activities are’ complicated by profound differences between countries in labor markets, culture, legal systems, economic systems, and the like.

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The Effects of Globalization on Multinational Corporations

Globalization is the competition in an international market. The growth rate of developing nations and their acquisitions of previously first-world owned corporations indicates that the developed world no longer has the upper hand economic growth in the west has been miniscule in comparison. Success in this new global market requires the ability to accommodate the different needs of diverse consumer groups. Companies can achieve this through product and process innovations and maximize profits. Entrepreneurship is also increasingly recognized and as an alternative course to fortune as opposed to trading rare commodities.

Companies from emergent economies are following the lead of their developed counterparts, issuing stocks and encouraging investment.… Read the rest

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What is CounterTrade?

Countertrade constitutes an estimated 5 to 30 percent of total world trade. Countertrade greatly proliferated in the 1980s. Perhaps, the single most important contributing factor is  Least Developed Countries (LDC’s) decreasing ability to finance their import needs through bank loans.

Countertrade, one of the oldest forms of trade, is a government mandate to pay for goods and services with something other than cash. It is a practice, which requires a seller as a condition of sale, to commit contractually to reciprocate and undertake certain business initiatives that compensate and benefit the buyer. In short, a goods-for-goods deal is countertrade.… Read the rest

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